MSCI’s plan to upgrade South Korea and Taiwan to developed-country status will lead to a rise in tax bill, Financial Times reports. The index provider is seeking to reclassify MSCI Korea and MSCI Taiwan as developed markets, which represents 14% and 11% of the MSCI emerging markets index.

A reclassification of MSCI’s emerging market index will expose U.S. holders of ETFs based on the benchmark to taxable capital gains. ETF providers escape crystallizing capital gains, which have to be distributed to investors, generating a tax liability. The underlying securities will have to be sold for cash if any rebalancing of the ETFs occurs.